taking the temperature
Brexit means potential changes in the legal aspects of business
Sponsors of this feature, leading Thames Valley- based law firm Pennington Manches, have helpfully identified likely Brexit legal implications, and provided some business actions to consider.
Corporate and M&A
Most English corporate law is not derived from EU legislation, so, apart from EU merger control laws, corporate law is unlikely to change significantly.
Apart from merger clearances, public M&A will be largely unaffected and significant changes to the UK Takeover Code are not anticipated.
But there may be changes to specific aspects of M&A, investment transactions and capital markets.
For example, UK equity capital markets derive much of their regulatory framework from EU legislation, including the Prospectus Directive, Transparency Directive, and Market Abuse Regulation. As a non-EU member, the UK’s capital markets regime will need to be deemed “equivalent” for UK prospectuses to receive mutual recognition in EU member states.
Commercial relationships
Businesses should assess whether existing contracts are likely to be affected by Brexit and consider post-Brexit contract inclusions that will protect commercial positioning.
Examples:
• Specific rights to terminate, triggered either by Brexit or by events arising from it
• Agree shorter-term contracts to avoid being tied in by unknown Brexit impacts.
Data Protection
New General Data Protection Regulation (GDPR) legislation is due to come into force across the EU in May 2018.
GDPR is likely to continue to be relevant post- Brexit for many UK organisations, particularly
those operating internationally. Businesses should continue working towards GDPR compliance and keep up with guidance and statements from the Information Commissioners Office.
Intellectual Property (IP)
Most UK IP rights are based on EU directives implemented by UK laws. Unitary rights such as EU trademark and registered and unregistered community designs will remain valid and enforceable until Brexit.
After Brexit, it may be possible to validate them through a simple conversion procedure. But businesses trading principally in the UK with an EU trademark may wish to consider applying for a separate UK trademark to avoid potential issues and costs associated with trademark transference.
Customs duties and VAT
The UK will have to reach new trade agreements with the EU and other countries on whether and what customs duties will apply.
VAT is currently subject to EU law but will not be post-Brexit. The UK could introduce new areas of zero-rating or otherwise amend the rules.
Employment law
Some changes are likely as Parliament will have the freedom to protect workers’ rights or remove red tape.
Three trends may emerge: • removal of less business-friendly legal aspects
• loosening of employer obligations during collective redundancy consultation
• moves to abolish Agency Workers Regulations, and possibly, reintroduction of tribunal discrimination award capping.
More details at Penningtons Manches Brexit Hub:
penningtons.co.uk/brexit/
IN ASSOCIATION WITH
THE BUSINESS MAGAZINE – THAMES VALLEY – OCTOBER 2016
businessmag.co.uk
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